U.S. Markets closed

General Dynamics says still focused on government cybersecurity business

General Dynamics Corp Vice President Nadia Short speaks at the Reuters Cybersecurity Summit in Washington May 13, 2013. REUTERS/Yuri Gripas

COLORADO SPRINGS, Colo. (Reuters) - General Dynamics Corp, the maker of Gulfstream jets, tanks and war ships, said it remained focused on its core cybersecurity business of serving government agencies and that its sale of Fidelis Cybersecurity Solutions was aimed at trimming a non-core business.

General Dynamics spokeswoman Lucy Ryan said on Tuesday Fidelis had doubled in size since General Dynamics acquired it in 2012 but it served a commercial customer base, not in the company's core area.

Nadia Short, vice president and general manager for General Dynamics' cyber business, said the company was focused on helping government agencies defend and protect their networks.

"We have a comprehensive and robust government-focused cybersecurity portfolio. And we are continuing to invest resources in technology development to ensure we deliver resilient, relevant and innovative solutions that support mission needs," Short said.

The Fidelis deal comes at a time when the United States is looking to spend more to protect federal and private networks from increasingly sophisticated hacking attacks.

President Barack Obama's budget proposal for the 2016 fiscal year seeks $14 billion for cybersecurity efforts across the U.S. government.

Marlin Equity Partners is buying Fidelis from General Dynamics. Terms of the deal, which is expected to close in the second quarter, were not disclosed. [ID:nBw1vtjk6a]

Peter George, who is currently president of General Dynamics Fidelis Cybersecurity Solutions, will become chief executive of the new independent company, Fidelis Cybersecurity, Marlin said.

Shares of General Dynamics, which is scheduled to report first-quarter results on April 29, were down 1 percent at $133.35 in afternoon trading on the New York Stock Exchange.

Up to Monday's close, the stock had fallen 2.1 percent since the beginning of the year, underperforming the Dow Jones U.S. Aerospace and Defense Index, which has risen 6.1 percent.


(Reporting by Andrea Shalal and Sweta Singh; Editing by James Dalgleish and Saumyadeb Chakrabarty)